Bills Digest no. 16 2009–10

WARNING:
This Digest was prepared for debate. It reflects the legislation as
introduced and does not canvass subsequent amendments. This Digest
does not have any official legal status. Other sources should be
consulted to determine the subsequent official status of the
Bill.

Office of the Fair Work
Building Industry Inspectorate. Reports prior to this Bill often
refer to a Building and Construction Division (BCD) of Fair Work
Australia incorporating the Office of the Fair Work Ombudsman

The Wilcox
Discussion Paper[1]
contains a useful chronology to Commonwealth developments in
regulating the building and construction industry. It is reproduced
below as it sets out the key instruments and dates relating to
building industry regulation. More recent developments have been
added to this chronology by the Digest authors.

On 28 November
2008, the Senate Standing Committee on Education, Employment and
Workplace Relations (the Senate Committee) reported on its inquiry
into a private member s bill entitled the Building and Construction
Industry (Restoring Workplace Rights) Bill 2008 (the private member
s bill).[3] That bill
sought to repeal both the Building and Construction Industry
Improvement Act 2005 (BCII Act) and the Building and
Construction Industry Improvement (Consequential and Transitional)
Act 2005. In considering the terms of the private member s
bill the Senate Committee also reviewed industrial issues
pertaining to regulation of the Building and Construction
industry.

The Rudd
Government had earlier requested the Hon. Murray Wilcox QC to
consult and report on matters related to the creation of a
specialist division, called the Building and Construction Division
(BCD) of the one-stop-industrial shop , Fair Work Australia
(FWA).[4]

FWA had been
outlined in Australian Labor Party (ALP) election policy (discussed
below) as the agency to incorporate most of the industrial and
workplace regulatory agencies established since 1997. FWA came into
operation on 1 July 2009, following the enactment of the Fair
Work Act 2009. Mr Wilcox presented his Discussion Paper in
October 2008 and his report on the proposed BCD of FWA (the Wilcox
Report) was released by Minister Gillard in March 2009. Its
recommendations are central to the proposed operation of this
Bill.[5]

The issues
outlined below cover: the main findings of the Cole Royal
Commission, a summary of the BCII Act, the ALP s election position
on the ABCC, the recommendations in the Wilcox Report on the
functions and powers for a proposed Building and Construction
Division of FWA (replacing the ABCC) and views of key organisations
on the BCII Act and its replacement under this Bill, including the
view of the ABC Commissioner, Mr Lloyd on the Wilcox
recommendations.

The existing BCII Act was drafted in response
to the report of a subsequent Royal Commission, the Royal
Commission into the Building and Construction Industry ( Cole Royal
Commission ).[6] The
Royal Commission report
contained 212 recommendations, the majority of which proposed
changes to federal workplace relations legislation governing the
building and construction industry.[7]

mechanisms to ensure that any participant in the industry
causing loss to other participants as a result of unlawful
industrial action is held responsible for that loss [9]

mechanisms to ensure that disputes are settled in accordance
with legislated or agreed dispute resolution procedures rather than
by the application of industrial and commercial pressure ,[10] and

creation of an independent body that will ensure that
participants comply with industrial, civil and criminal laws
applicable to all Australians....as well as industry specific laws
applicable to this industry only. [11]

It might be noted that the Cole Royal Commission
exhibited a different view on the freedom of association and the
freedom not to associate than did the 1982 Winneke Royal Commission
into the Builders Labourers Federation which accepted the practice
of no ticket no start practices in the building industry:

The building industry magnifies problems which,
traditionally, exist where unionists work alongside non-unionists,
because all people share the benefits of working conditions which
apply universally on the site. Improvements in these conditions
including site amenities and safety conditions have been gained, to
a significant extent, by labour organisations. Feelings of
resentment against those who have not, and will not, contribute to
the cost of maintaining those conditions, accordingly, runs
high

Throughout the 1970s the industry both employer
and employee organisations alike has sought, by empirical
processes, to minimise the disharmony which has hitherto existed by
establishing a closed shop policy. In its operation, this policy
has meant that persons working on major construction sites must
belong to an appropriate union The policy has been enshrined, at
least in the south-eastern states and the A.C.T. in the no ticket
no start agreements The policy is embraced by both employer and
employee organisations alike.[12]

What had changed between the Winneke Royal
Commission and the Cole Royal Commission were the legislative
provisions of the Workplace Relations Act 1996 (WR Act)
curbing the closed shop and milder forms of union security
agreements. In particular the freedom of association provisions
which supported non association, prohibition on strike pay,
prohibition on coercion to enter into enterprise bargaining and the
prohibition on union bargaining fees (in lieu of union
membership).

Nevertheless, the perception of the
infringement of these provisions resulted in the Cole Royal
Commission calling for cultural change in the form of:

recognition by all participants that the rule of law applies
within the industry [13]

recognition, principally by the unions but also by the major
contractors and subcontractors, that in Australia there exists
freedom of choice to either join or not join an association of
employees[14]

an attitudinal change of participants regarding management of
building and construction projects that is, control should be
exercised by head contractors and major subcontractors, not by
unions[15] and

an attitudinal change to safety by all participants:
governments, clients, contractors, subcontractors, unions and
workers.[16]

The legislation which gave effect to the Cole
Commission s desire for the implementation of the rule of law
included the Workplace Relations Amendment (Codifying Contempt
Offences) Act 2004 (WRA (Codifying Contempt Offences) Act) and
later the BCII Act.

The BCII Act incorporated provisions earlier
set out in the WRA (Codifying Contempt Offences) Act in respect of
the provision of evidence. It applies to certain parts
(mainly high rise buildings) of the building and construction
industry and certain areas of off-site work. The BCII Act:

allows the Minister to issue a Building Code, prescribing
conduct and protocols on contractors bidding for Commonwealth (and
associated) building work[17]

makes broader forms of industrial action than are prescribed
under the FW Act, unlawful[18]

trebles the maximum penalties, stiffens the criteria for the
application of a penalty and enhances access to uncapped damages
for unlawful conduct (than are provided currently under the FW
Act)[20]

establishes the Australian Building and Construction
Commissioner (ABC Commissioner) and establishes the Federal Safety
Commissioner[21]

provides the ABC Commissioner with wide-ranging powers to
monitor, investigate and enforce workplace laws and building codes
in the industry[22]

provides the ABC Commissioner power to compel a person to
produce information and documents, attend meetings and answer
questions regarding building industry matters,[23] and

provides that failure to cooperate with the Commissioner is
punishable by up to six months' imprisonment.[24]

The BCII Act received assent on 12 September 2005 (as did the
related consequential and transitional Act). Sections of the BCII
Act relating to industrial action had a retrospective commencement
date of 9 March 2005.

The ALP undertook to maintain a specialist
inspectorate division within the proposed one-stop-shop , Fair Work
Australia for certain industries stating that:

Labor does not believe in separate industrial
rules and regulations for different industries. Under Labor all
employers, employees and unions across all industries will be
required to comply with the rules and will face penalties if they
do not do so. Fair Work Australia s inspectorate will have
specialist divisions that can focus on persistent or pervasive
unlawful behaviour in particular industries or sectors. The first
divisions established will be for the building industry and
hospitality industry.[25]

Later, the ALP s workplace relations policy
confirmed a move of resources and functions from the ABCC to a
specialist division within the inspectorate of Fair Work
Australia:

The current Australian Building and
Construction Commission arrangements will remain in place until the
31st of January 2010 [ ] At that time, those responsibilities will
be transferred to a specialist division within the inspectorate of
Fair Work Australia [ ] Labor s system will be simpler with the
ABCC and then the specialist inspectorate within Fair Work
Australia ensuring compliance with our tough rules on industrial
action and strike pay. Labor will consult extensively with industry
stakeholders to ensure the transition to new arrangements will be
orderly, effective and robust. The principles of the current
framework that aim to ensure lawful conduct of all participants in
the building and construction industry will continue, as will a
specialist inspectorate for the building and construction
industry.[26]

the proposed Specialist Division be located within the Office of
the Fair Work Ombudsman but have:

operational autonomy under a Director, appointed by the
Minister, who would implement policies, programs and priorities
determined by an advisory board comprising the Fair Work Ombudsman,
the Director and a number of part-time members appointed by the
Minister; and

funds allocated each year against an Outcome related only to
the Specialist Division.[27]

the provisions of the Fair Work Bill governing:

the conduct

a notice to a person compulsorily to attend for interrogation
be issued only by a presidential member of the Administrative
Appeals Tribunal who is satisfied by written material, which may
include evidence on the basis of information and belief , that:

the Building and Construction Division has commenced an
investigation into a particular suspected contravention, by one or
more building industry participants, of the Fair Work Act,
an industrial law , as defined by that Act, or an industrial
instrument made under that Act;

there are reasonable grounds to believe that a particular
person has information or documents relevant to that investigation,
or is capable of giving evidence that is relevant to that
investigation;

it is likely to be important to the progress of the
investigation that this information or evidence, or those
documents, be obtained; and

having regard to the nature and likely seriousness of the
suspected contravention, any alternative method of obtaining the
information, evidence or documents and the likely impact upon the
person of being required to do so, insofar as this is known, it is
reasonable to require that person to attend before the Director or
a Deputy Director and answer questions and/or produce documents
relevant to the investigation;

of employers, employees and industrial associations; and

penalties for contraventions of the Fair Work Bill;

apply, unchanged, to participants in the building and
construction industry.[28]

the Director of the Building and Construction Division be
invested with a power, similar to that contained in section 52 of
the Building and Construction Industry Improvement Act
2005, to cause people compulsorily to attend for
interrogation, but subject to the safeguards contained in
Recommendation 4; and

the grant of this power be reviewed after five years;

in order to ensure review, the provisions in the new
legislation providing for compulsory interrogation be made subject
to a five-year sunset clause.[29]

the use of compulsory interrogation be subject to the following
safeguards:

the Director or a Deputy Director of the Building and
Construction Division preside at all compulsory
interrogations;

the Commonwealth Ombudsman monitor proceedings at all
compulsory interrogations and for that purpose the Director:

promptly notify the Commonwealth Ombudsman of the issue of all
notices to attend for interrogation; and

promptly after the interrogation, supply to the Commonwealth
Ombudsman a report, a video recording of the interrogation and a
copy of any written transcript; and

the Commonwealth Ombudsman report to Parliament annually, and
otherwise as required, concerning the exercise of the power of
compulsory interrogation.[30]

the legislation authorising compulsory interrogation provide
for:

payment to persons summoned for interrogation of their
reasonable expenses (travelling, accommodation and legal, as may
be) and any loss of wages or other income; and

recognition and availability of client legal privilege and
public interest immunity.[31]

a new Division 4 be added to Part 5-2 of the Fair Work Bill
relating to the building and construction industry , as therein
defined. The definition of building and construction industry
follow the definition of building work in the Building and
Construction Industry Improvement Act 2005, but excluding
off-site work.[32]

the Director of the Building and Construction Division have all
the functions, powers and responsibilities, in relation to the
building and construction industry , as defined in the new
legislation, that the Fair Work Ombudsman has in respect of other
industries; including, in particular, investigation of suspected
unlawful behaviour by any building industry participant (whether
employer, employee or industrial association) and the prosecution
of penalty and other legal proceedings.[33]

Except perhaps in rural and remote areas, the Building and
Construction Division have its own dedicated operational staff,
including inspectors.[34]

ACCI lodged a formal submission to the Senate
Education Employment and Workplace Relations Committee (the Senate
EEWR Committee) urging that the Bill be blocked. ACCI does not
support proposals that would, in its view:

remove existing unlawful industrial action and penalty
provisions

remove the current ability for a successful party to recoup
legal costs

automatically repeal the coercive powers after five years,
which appears to pre-empt an inquiry into the issue

place strictures on exercising coercive powers where similar
Commonwealth regulators do not have similar 'safeguards' or
oversight mechanisms.

ACCI argues that the BCII Act was not part of
WorkChoices . It was the culmination of an extensive Royal
Commission into the industry that looked at conduct by all
participants, not just unions. The Royal Commission s 200 specific
recommendations for legislative reform were designed to tackle the
widespread unlawfulness and 'disregard of the rule of law'. It
argues that the Bill has the potential to reverse the achievements
that have so far been made, and threaten the important reform
agenda of achieving, once and for all, lasting cultural change for
the industry' and the legislation, if passed by Parliament, would
essentially gut the most potent and effective provisions in the
existing framework provisions that deal effectively with
unlawful wildcat strike action, coercion and duress. ACCI
also raises legal questions about the ability for Parliament to
delegate its powers to allow an 'assessor' to switch off vital
coercive investigation powers for a building project.

The ACCI considers that, in light of the
Government's expenditure on national infrastructure projects,
proposed changes that add substantial costs and lead to potential
industrial unrest will come at a high price for the community.
There are still problems in the industry which require tough laws
as illustrated by a recent Federal Court case, where it stated in
its decision that the union's breach of an order the very same day
it was issued, reflects the cavalier attitude taken by the CFMEU to
the Order and the Court. Following a Royal Commission into the
issue and countless examples of the ABCC's success to date, ACCI
does not consider the case has been made to change the existing
laws.[35]

Most of the WR Act prohibitions cited earlier
have been found to run squarely against relevant International
Labour Organisation conventions.[36] Australia has been urged repeatedly by the ILO to
bring its industrial laws into conformity with the ILO conventions
which it has signed. At the 98th session of the ILO s International
Labour Conference, the Committee of Experts on the Application of
Conventions and Recommendation (CEACR) reiterated its concerns over
Australian labour law and the BCII Act 2005 specifically. The CEACR
noted, at that time, that the newly elected Rudd Government had
informed the CEACR of its commitment to address issues it has
raised with regard to the BCII Act.

Building industry. In its previous
comments, the Committee, taking note of the conclusions and
recommendations of the Committee on Freedom of Association in Case
No. 2326 (338th Report, paragraphs 409 457), had raised the need to
rectify numerous discrepancies between the Building and
Construction Industry Improvement (BCII) Act, 2005, and the
Convention. The Committee had regretted, in particular, the
declining rate of trade unionism in the industry which, in the
Committee s view, might not be unrelated to impediments placed over
collective bargaining in the BCII Act

The Committee, therefore, once again urges the
Government to indicate in its next report any measures taken or
contemplated with a view to: (i) amending sections 36, 37 and 38 of
the BCII Act, 2005, which refer to unlawful industrial action
(implying not simply liability in tort vis- -vis the employer, but
a wider responsibility towards third parties and an outright
prohibition of industrial action); (ii) amending sections 39, 40
and 48 50 of the BCII Act so as to eliminate any excessive
impediments, penalties and sanctions against industrial action in
the building and construction industry; (iii) introducing
sufficient safeguards into the BCII Act so as to ensure that the
functioning of the Australian Building and Construction (ABC)
Commissioner and inspectors does not lead to interference in the
internal affairs of trade unions especially provisions on the
possibility of lodging an appeal before the courts against the ABC
Commissioner s notices prior to the handing over of documents
(sections 52, 53, 55, 56 and 59 of the BCII Act); and (iv) amending
section 52(6) of the BCII Act which enables the ABC Commissioner to
impose a penalty of six months imprisonment for failure to comply
with a notice to produce documents or give information so as to
ensure that penalties are proportional to the gravity of any
offence. The Committee also requests the Government to indicate any
measures taken to instruct the ABCC to refrain from imposing
penalties or commencing legal proceedings under the ABCC while the
review is under way. [37]

In a letter from the office of the Australian
Building and Construction Commissioner to the Deputy Prime Minister
which was tabled in the Parliament,[38] the ABC Commissioner made the
following comments:

The maximum penalty for industrial action set under the BCII
Act of $110,000 for a body corporate and of $22,000 for an
individual should not be reduced to $33,000 and $6,600 respectively
which would result from the Wilcox Report: high and distinct
penalty levels for the building and construction industry are
justified (the industry) has over the years recorded excessive
levels of unlawful industrial action, coercion and discrimination
.[39]

The proposed FW Act definition of industrial action may allow
retrospective agreement by an employer to a period of industrial
action, allowing strikers to be paid (unlike paragraph 36(1)(e) of
the BCII Act which should be retained).[40]

The BCII Act at section 44 enables prosecution for undue
pressure to make, vary or terminate a workplace agreement , whereas
Wilcox does not support retention of this provision.[41]

The BCII Act s requirements on the ABC Commissioner to exercise
his power to conduct investigations judiciously means that the ABCC
is cautious in its use of the compulsory interrogation power and
claims some witnesses would not provide evidence without being
compulsorily required to attend and give evidence for fear of
retribution.[42]

Proposals for the video recording of every examination may be
expensive in relation to the benefits derived; an option may be to
video on a selective basis.[43]

The Wilcox proposal that the Guidelines be made a disallowable
instrument is opposed. The current arrangement of these being an
administrative document, whereby new trends and developments can be
readily responded to is preferred. A disallowable instrument raises
the prospect of Parliamentary scrutiny, court and tribunal
interpretation .[44]

The Wilcox proposal to make ABCC decisions seeking prosecution
for breaches of the Code Guidelines to be judicially and
administratively reviewable is unjustified.[45]

The definition of building work as contained in the Guidelines
should be emulated in proposed legislation and that certain related
manufacturing activities such as the manufacture of pre-cast
concrete panels very closely resembles on-site building work
.[46]

The Wilcox proposal for the ABCC s replacement to have a role
in investigating phoenix companies is better carried out by other
agencies as it would have resource cost issues.[47]

A statutory right of intervention should be retained as
provided in the BCII Act, as the intervention right has been
exercised frequently, in 93 AIRC cases and 15 court cases, and
courts and tribunals are sometimes unaware of the full range of
legal obligations and rights arising under labour laws.

In a joint submission
to the Senate EEWR Committee inquiry into the Bill, the combined
construction unions consisting of the CFMEU, AMWU, AWU and CEPU
maintain the view that there should be no specific industrial
regulation covering the building and construction industry.[49] The combined
construction unions urge the Senate EEWR Committee to recommend an
immediate repeal of the BCII Act, enabling the FW Act to regulate
the industry.[50]

They argue that allegations of criminal
conduct have been raised by the media, by the Federal Opposition,
by employer groups and by the federal Minister for Education
Employment and Workplace Relations to justify retention of the BCII
Act. However they contend that the BCII Act deals with industrial
law not criminal law. The combined construction unions submission
contends that public debate over a government agency s
investigative powers should commence by querying whether those
powers are appropriate to the matters under investigation. They
claim that such powers have no place in industrial law. Therefore
they reject the claim by ABC Commissioner John Lloyd that coercive
powers are necessary in part to protect witnesses, alleging the ABC
Commissioner provided no evidence that such fear exists, or if it
does, that it is well-founded. Without coercive powers it would
still be open to a prosecuting authority to protect a witness by
subpoenaing them.[51]

If it is decided to retain coercive powers,
the legislation should provide a switching on rather than a
switching off mechanism. This could be used in exceptional
circumstances and subject to other processes and safeguards in the
Bill. The combined construction unions argue that the Bill s
switching off facility under the Bill s proposed Independent
Assessor, restricted to new projects, is arbitrary.[52]

The combined construction unions propose that
the threshold of the safeguards be raised to expressly require the
Administrative Appeals Tribunal to have regard to both the
seriousness of the alleged contravention and the impact on the
person to be examined. It should be made clear that examination
notices are a last resort, and want the person being issued with
the notice to get an opportunity to be heard by the AAT on whether
the proposed issuing requirements have been satisfied. Examination
notices should have to spell out the documents required.[53]

The combined construction unions argue that
the proposal for a separate and autonomous statutory agency working
in parallel with, but independent of, the OFWO is not consistent
with the relevant Wilcox recommendation which is that the
specialist division be located within the office
of the OFWO but operate with autonomy.[54]

They also say that the Wilcox recommendation
that the specialist division implement policies, programmes and
priorities determined (rather than recommended) by an advisory
board of public servants and industry representatives for the
proposed building inspectorate should be implemented, arguing it
would introduce accountability and balance into the work of this
agency.[55]

The combined construction unions argue that
the government should amend the Bill to reflect the Wilcox
recommendation against the new inspectorate retaining a statutory
right of intervention in court of FWA proceedings, with the issue
of intervention left to the discretion of the relevant court or
tribunal.[56]

The Explanatory Memorandum states that the
financial impact of the Bill is Budget neutral.[58] However, it is noted that the
Ombudsman Office will take on new oversight functions under the
Bill. Even though those additional functions fit very well within
its existing role, they cannot be performed without adequate
resources.

The Coalition is likely to oppose the
Bill.[59] Both
Senator Xenophon and Senator Fielding have expressed some concerns
about the Bill and at least one is expected to vote against
it.[60] However,
Senator Xenophon has expressed limited support for Minister Gillard
s direction concerning resources to the ABC Commissioner.[61]

The ALP on the other hand has always been
prepared to stand by its 2007 commitments. Should the Bill be
defeated and become the subject of an election debate, then the ALP
is likely to argue that any future legislation should retain much
of the model proposed in this Bill. In other words, the penalties
for industrial action in the building industry should be set at the
standard of the FW Act. Investigatory powers for the ABCC
replacement should be retained, but with appropriate safe guards
and support measures for those required to testify at a building
industry inspectorate investigation.

Item 2 repeals and replaces
section 3, the objects section of the BCII Act.
The change of emphasis in the Bill is reflected in the new objects
section. Whereas the current section is focused on enabling
building work to be carried out fairly, efficiently and
productively the new objects is to provide a balanced framework for
cooperative, productive and harmonious workplace relations in the
building industry .

Item 48 amends the definition
of building work in section 5. The term 'building work' is central
to the BCII Act as it forms the basis of terms such as building
employee and building agreement, and hence terms such
as building employer and building
association.

The definition of building work in
the BCII Act includes a broad range of activities whether these are
traditionally thought of as 'building' or not including fit-out,
restoration, repair and demolition, any work 'part of or
preparatory to' such activities, and 'pre-fabrication of
made-to-order components'. Specific exclusions from the definition
of 'building work' include mining and extraction activities and
domestic building, including alteration or extension, except where
this is part of a project including at least 5 single-dwelling
houses.

Item 48 would amend the
definition of building work at subparagraph
5(1)(d)(iv) to exclude a reference to off-site
pre-fabrication of made-to-order components from the definition.
The Explanatory Memorandum states that it is intended that the
amended definition will exclude manufacturing that takes place in
permanent off-site facilities and is separate from the building
project but that pre-fabrication of building components that takes
place on auxiliary or holding sites separate from the primary
construction site(s) will remain covered by the definition of
building work.[63]

The ACTU submission to the Senate inquiry
states that the exclusion of off-site pre-fabrication from the
definition of building works is an improvement and will bring
greater certainty to the investigation of suspected breaches of the
laws.[64] Master
Builders, on the other hand, argues the amendment will cause
confusion as to the dividing line between when the Bill s provision
will or will not apply since many businesses have staff engaged in
both on-site and off-site fabrication.[65]

Item 49 repeals
Chapter 2 of the BCII Act, and replaces it with a
newChapter 2 containing
proposed sections 9 to 26M. The
effect is to abolish the Office of the Australian Building and
Construction Commissioner and create a new statutory agency called
the Office of the Fair Work Building Industry Inspectorate (the
Building Inspectorate). The staff of the Building Inspectorate
would be engaged under the Public Service Act 1999
(proposed section 26K).

The Building Inspectorate would be headed by a
Director appointed by the Minister (proposed section
9). The Director's functions are set out in
proposedsection 10 and include
the functions of promoting harmonious, productive and cooperative
workplace relations in the building industry and promoting
compliance with designated building laws[66] and the Building Code including by
providing education, assistance and advice to building industry
participants. The Director s functions are drafted broadly. Amongst
other things, he/she may:

investigate suspected contraventions of a designated building
law, a safety net contractual entitlement or the Building Code

institute court proceedings or make applications to FWA
regarding building laws or safety net contractual entitlements as
they relate to building industry participants

refer matters to other relevant authorities

provide representation to a building industry participant in
court or FWA proceedings if the Director considers that this would
promote compliance

disseminate information, and provide advice and assistance to
building industry participants

make submissions and provide information to the Independent
Assessor[67]

any other functions conferred on the Director by any Act.

A note confirms that the Director also has the
functions of an inspector under proposed section 59A.[68]

These functions correspond in many respects to
the ABC Commissioner s functions, although note the additional
function of inquiring into, investigating, and commencing
proceedings in relation to safety net contractual entitlements as
they relate to the building industry. This provision would enable
the Inspectorate to take action in relation to breaches of a modern
award or the National Employment Standards.[69]

Proposed section 11 provides
that the Minister may give directions to the Director about the
policies, programs and priorities of the Director and about the
manner in which the Director is to exercise his or her powers and
functions (although not in relation to a particular case). Such
directions by the Minister are disallowable instruments. This
section corresponds to existing section 11, although the ability of
the Minister to give directions about the policies, programs and
priorities of the Director is not included in existing section 11.
Master Builders sees this as giving the Minister an extension of
power which could affect the independence of the Inspectorate and
therefore recommends that it be removed from the Bill.[70]

Proposed section 13 allows
the Director to delegate certain of his or her powers and functions
to either a member of the Building Inspectorate staff or to an
inspector. A list of all such delegations must be included in the
Director s annual report (proposed section 14).
The Director s powers as an inspector and some examination powers
may not be delegated[71] (proposed subsection 13(2)). The power
to conduct examinations may only be delegated to SES employees
(proposed subsection 13(3)).

Proposed section 14 deals
with annual reporting requirements. The new provision removes some
of the existing reporting requirements namely the mandatory
requirement to include details of the number, and type of matters
investigated by the ABC Commissioner; details of assistance to
building employees and building contractors in connection with the
recovery of unpaid entitlements; and details of the extent to which
the Building Code was complied with during the financial year.

Proposed sections 15 to 22
deal with the terms and conditions of the Director s appointment
and are very similar to those for the existing ABC
Commissioner.

The construction unions submission notes that
the Wilcox inquiry specifically considered the arguments about the
structure and location of any specialist agency. Ultimately the
Inquiry rejected the model set out in the Bill, namely a separate
and autonomous statutory agency working in parallel with, but
independently of, the OFWO. Wilcox recommended that the proposed
Specialist Division be located within the office of the FWO but
with operational autonomy.[72] The unions note that whilst the Wilcox recommendations
do not reflect their preferred position, in the absence of any
compelling reasons, the Government should not depart from this key
finding of the Wilcox Report which it commissioned.[73]

The ACTU submission also questions the
rationale of a separate and autonomous statutory agency arguing
that an inspectorate that is an administrative unit within the OFWO
is more likely to develop a successful culture. The ACTU also fears
a separate inspectorate will struggle to develop an impartial
enforcement culture, and that the deep distrust of the ABCC felt by
many workers is likely to carry over to the new
Inspectorate.[74]

Industry groups are critical of the new
section 10 because it gives the Director the function of inquiring
into, investigating, and commencing proceedings in relation to
safety net contractual entitlements as they relate to the building
industry. Master Builders argues that the ABCC has been focussed on
restoring the rule of law in the industry and that this new
function would be a diversion of resources from the policing
obligations to act lawfully.[75] The AiG assert that the Building Inspectorate
should not have its resources diverted to underpayment claims and
that the skills of the ABCC inspectors are not suited to this
work.[76]

Proposed sections 23 to
26H provide for the creation of a Fair Work
Building Industry Inspectorate Advisory Board (the Advisory Board).
The Advisory Board would be empowered to make recommendations to
the Director on policies to guide the performance of the office's
functions and exercise of its powers, its priorities and programs,
and any other matter at the request of the Minister
(proposed section 24). The Advisory Board would be
comprised of the Director, the Fair Work Ombudsman (FWO), and up to
five other part-time members, including one each from a union and
employer background, to be appointed by the Minister
(proposed sections 25 and 26).
Terms and conditions of appointment and the processes regarding the
Advisory Board s role are set out in proposed sections
26 to 26H. There must be at least two
meetings in each financial year and a quorum for meetings is to
consist of the Chair, the Director and the FWO.[77]

The construction unions submission supports
the introduction of an Advisory Board, noting that its constitution
of apolitical public servants and industry representatives, would
introduce much-needed accountability and balance into the work of
Building Inspectorate.[78] Master Builders, on the other hand, believes the
Advisory Board is unnecessary and will prove to be ineffective,
cause unnecessary delays and may lead to conflict of interest for
the Director over differences in Ministerial directions and Board
recommendations.[79]

Item 51 is one of the most
significant amendments in the Bill. It removes Chapters
5 and 6 of the BCII Act dealing with
unlawful industrial action, coercion and the associated civil
penalties that are specific to the building industry.

The effect of item 51 is that
there would no longer be unlawful industrial action and coercion
provisions specific to the building and construction industry.
Rather, the industrial action control and penalty regime introduced
by the FW Act would apply equally in the case of industrial action
by building industry participants.

A major effect of this change is that there
will no longer be higher penalties for building industry
participants for breaches of industrial law. Maximum penalties will
be cut from $22 000 to $6 600 for individuals and from $110 000 to
$33 000 for a body corporate.

The Wilcox Report recommended the removal of
Chapters 5 and 6. In relation to the unlawful industrial action
provisions in Chapter 5 the Wilcox Report concluded that there was
no practical important difference between rules specific to the
building industry and those under the FW Act and that retention of
the two separate regimes would serve only to complicate the
law.[80]

AMMA, in its Senate inquiry submission,
disputes this argument and contends that the FW Act is unable to
adequately deal with all types of unlawful conduct in the building
and construction industry.[81] The submission provides a detailed analysis of the
provisions in the FW Act and the BCII Act and concludes for example
that section 343 of the FW Act imposes a higher threshold than the
BCII Act and may not adequately deal with some of the inappropriate
and unlawful conduct that in its view, continues to plague the
industry and that reliance on the FW Act may mean that some
behaviour in the industry will fall under the radar .[82]

In relation to the different penalty regime in
Chapter 7 the Wilcox Report noted that there is no less need to
regulate industrial action in industries other than the building
and construction industry and recognising the serious consequences
of industrial action in any industry, the FW Act contains a number
of severe constraints upon its occurrence.[83]

In relation to the higher penalties the Wilcox
Report concluded:

The history of the building and construction
industry may provide a case for the retention of special
investigative measures, to increase the chance of a contravener in
that industry being brought to justice. However, I do not see how
it can justify that contravener then being subjected to a maximum
penalty greater than would be faced by a person in another
industry, who contravened the same provision and happened to be
brought to justice. To do that would be to depart from the
principle, mentioned by ACTU, of equality before the law.[84]

As noted above, the ABC Commissioner has
indicated that in his opinion high and distinct penalty levels for
the building and construction industry are justified on the basis
of the record of excessive levels of unlawful industrial action,
coercion and discrimination. Lower penalties will reduce the
deterrence effect of the penalty regime.[85]

ACCI supports the ABC Commissioner s views and
maintains that there are good public policy reasons why existing
penalty provisions and different industrial law provisions should
continue to exist. ACCI submits that equality before the law is not
an absolute principle and should not be the dominant justification
for removing what it believes to be targeted, appropriate and
effective provisions.[86]

Master Builders submission highlights that the
Building Inspectorate will have no separate underlying provisions
to enforce but will be enforcing provisions of the FW Act in the
capacity of an Inspector.

Without dedicated laws to deal with the subject
matter of chapters 5 and 6 and the related penalties for their
breach, the work of the ABCC cannot be continued. Content is not
only important; it is fundamental to the proper functioning of the
successor body.[87]

Master Builders believes that the penalties
for taking unlawful industrial action in particular are appropriate
considering the harsh consequences for all parties when unlawful
industrial action occurs. It argues that administering the special
rules for the industry has been part of the ABCC s success.[88]

AMMA submits that reducing the higher
penalties now, before the culture of the industry has changed, will
undo those improvements that have occurred since the commencement
of the ABCC and the BCII Act.[89]

Against this, the unions and the ACTU strongly
support the repeal of the Chapters 5 and 6 on the basis that it
will give effect to the fundamental principle of equality before
the law.[90]

Item 52 is a key amendment.
It repeals and replaces Part 1 in Chapter
7 of the BCII Act. It deals with the powers to obtain
information (including through compulsorily requiring a person to
attend an examination and answer questions) or documents from a
person whom the Director believes has information or documents
relevant to an investigation. Importantly, and in contrast to
existing provisions, use of the powers is dependent upon a
nominated presidential member of the Administrative Appeals
Tribunal (AAT) being satisfied a case has been made for their
use.

The new Part 1
(proposed sections 36 to 58)
applies to an investigation by the Director into a suspected breach
by a building industry participant of a designated building
law[91] or a safety
net contractual entitlement (proposed section
36A). The compulsory examination powers are available
where the Director is investigating a breach of a safety net
contractual entitlement, provided there is a reasonable belief that
an employer or other party has breached a provision of an NES,
modern award or other instrument referred to in subsection 706(2)
of the FW Act (new subsection 36A(2)).

Central to the new arrangements for
compulsorily obtaining information is the concept of an examination
notice . Proposed section 45 sets out the
requirements for when and how the Director may apply to a nominated
AAT presidential member[92] for issue of an examination notice requiring a person
to attend an examination in relation to an investigation.
Proposed subsection 45(1) provides that the
Director may only apply for a notice if he or she believes on
reasonable grounds that a person has information or documents or is
capable of giving evidence of relevance to an investigation.
According to proposed subsection 45(5),
applications to the AAT presidential member must be accompanied by
an affidavit by the Director including amongst other things:

details of the investigation (or investigations) to which the
application relates

the grounds on which the Director believes the person has
information or documents, or is capable of giving evidence,
relevant to the investigation

details of other methods used to attempt to obtain the
information, documents or evidence.

With respect to the issuing of an examination
notice, proposed section 47 requires that the AAT
presidential member must be satisfied amongst other things
that:

all other methods of obtaining the material or evidence have
been tried or were not appropriate

the information or evidence would be likely to be of assistance
to the investigation

it would be appropriate, having regard to all of the
circumstances, to issue the examination notice, and

any other matter prescribed by the regulations.

The Minister has stated that it is the
Government s intention that the regulations prescribe that the
nominated AAT presidential member also considers additional
criteria relating to the nature and likely seriousness of the
alleged breach and the likely impact upon the person subject to the
notice.[93]

It could be asked why these additional
criteria are to be in the regulations and not included in the Bill
s provisions.

Proposed section 49 requires
the Director to notify the Commonwealth Ombudsman when the
examination notice has been issued and provide the Ombudsman with a
copy.

Proposed section 50 sets out
the process by which the Director gives an examination notice to
the person to whom it is issued. Amongst other things, it provides
the Director with some discretion as to the timing of compliance
with the examination notice. Proposed section 48
describes the form and content of the examination notice.

Item 55 repeals section 52
and replaces it with a new section 52 that creates
an offence of failing to comply with an examination notice. The
new subsection 52(1) effectively replicates the
existing subsection 52(6) by making it an offence to fail to comply
with requirements imposed by an examination notice to produce
documents, information or attend to answer questions. It is also an
offence to fail to take an oath or affirmation when required to do
so or to refuse to answer questions relevant to the investigation
when being examined. The new section retains the BCII Act's six
months jail penalty for this offence but adds a note stating that a
court can instead of, or in addition to jail, impose a maximum $3
300 fine for breaches, and five times that for a body corporate
convicted of an offence.[94]

Significantly, new subsection
52(2) provides an exemption from the requirement to
provide information or answer questions if the person would be
required to disclose information that is subject to either legal
professional privilege or would be protected by public interest
immunity. The public interest immunity does not exist under the
existing provisions.

Proposed sections 46, 49, 54A,
58 and 59 contain further checks on the
use of the compulsory examination powers. These are:

people summonsed for examination will be reimbursed for their
reasonable expenses, including, upon application to the Director,
reasonable legal expenses (newsection
58)

the Commonwealth Ombudsman will monitor and review all
examinations and provide reports to the Parliament on the exercise
of this power (new sections 49 and
54A).

the examination powers provision will be subject to a five year
sunset clause (new section 46). The decision on
whether the coercive powers will be extended after five years will
be made following a review of their use and ongoing need.[95]

The compulsory examinations provisions have
generated much debate from the full range of interested
parties.

The combined construction unions submission
expresses strong concerns about these coercive powers of
investigation noting that they are inappropriate in regard to the
types of matters that are being investigated. They note that the
BCII Act does not generally deal with criminal conduct, but rather
is concerned with certain forms of industrial behaviour.

Arguments about the need to retain the laws
because of widespread violence or threats of violence, criminal
damage to property, extortion and the like are not only misplaced
but have the effect of distorting the policy debate and the public
perception of what the laws are designed to achieve.[96]

The combined construction unions reinforce
their argument relying on Professor George Williams and Nicola
McGarrity from the Gilbert and Tobin Public Law Centre who in 2008
wrote:

The ABCC is primarily responsible for
monitoring, investigating and enforcing civil law, or more
specifically, federal industrial law like the BCII Act and industry
awards and agreements. Investigatory powers of the type bestowed on
the ABC Commissioner had previously been unheard of in the
industrial context. In this light, the powers of the ABCC are not
only extraordinary, but unwarranted... Such powers should not be
bestowed on a body dealing with contraventions of the civil law and
potentially minor breaches of industrial instruments.[97]

As noted above, the ABC Commissioner has
advised that the ABCC s compliance powers have been critical to the
success of its Court proceedings. The Commissioner also argues for
the retention of the coercive powers on the basis that some
witnesses have been glad to be forced to give evidence because this
gives them some protection from reprisals.[98]

AMMA argues in support of the existing
investigative powers stating there is no evidence to suggest they
have been misused.[99] They note that the ABC Commissioner s position has been
supported by the Wilcox Report. Of considerable importance is the
protection such power gives to those person who are otherwise
willing to assist the ABCC but do not want to be seen to be
willing.[100]

The removal of the ability to impose
confidentiality undertakings on examinees (proposed subsection
51(6)) has also been debated in Senate inquiry submissions. The
combined construction unions submission argues that the secrecy
which has attached to the exercise of the coercive powers is highly
objectionable.

The closed interview process and the ABCC s
non-disclosure directions cast a pall over Australian industrial
relations and taint it with quasi-criminal overtones. The public
interest in having all aspects of industrial relations played out
in a public arena overseen by open and independent tribunals far
outweighs any perceived benefit to a government agency in its
investigation process in being able to impose confidentiality
obligations.[101]

Master Builders, on the other hand strongly
opposes proposed subsection 51(6) arguing it could have disastrous
consequences for an investigation into, for example, widespread
unlawful action where the content of the questions and confidential
material was put to an examinee. Such a provision departs from
normal practices of not sharing such information because it creates
scope for witnesses to co-ordinate their responses.[102]

In relation to the public interest immunity
from examination, Master Builders oppose it arguing the boundaries
for the exemption would be too broad and could be prejudicial to an
investigation.[103] AiG also argue that it be removed.[104]

In relation to the five year sunset clause,
industry groups such as AiG and AMMA argue there is no evidence
that the present conditions in the building and construction
industry will not be present in five years, that would justify an
automatic repeal at a set date.[105]

In reference to the Ombudsman s role, the
combined construction unions argue that Ombudsman oversight,
together with the requirement to video tape examinations would be
an important, inexpensive and efficient hand-brake on any potential
abuses occurring during the interview process.[106]

The Ombudsman Office notes its new oversight
functions under the Bill fit very well within its existing role and
that its new functions can be performed with comparatively modest
additional resources for the office. That said the new function
cannot be performed without adequate resources and at this stage
there has been no agreement on the resources that will be made
available.[107]

Master Builders states that the Ombudsman
involvement will impose unreasonable and cumbersome multi-layered
bureaucratic procedures on the Director.[108]

Some of the debate about the coercive powers
has been based on comparisons with other legislation. Those in
support of the powers often point to other statutory bodies such as
the ACCC, ATO and ASIO that have similar powers, as a justification
for their ongoing use.

Challenging this argument, the Law Institute
of Victoria and Professor George Williams share the view of the
Wilcox Report which states:

All the other Australian statutory authorities
holding powers of coercive interrogation are concerned with matters
of major public importance: national security, the management of
the national economy and national tax system, the suspected corrupt
behaviour of public officials and the suspected misconduct of
police officers. Generally speaking, although not always, the
suspected behaviour would amount to serious criminality. In
contrast, a notice may be given under section 52 of the BCII Act in
order to obtain information relevant to an investigation concerning
conduct that may not be, and usually is not, a criminal offence;
but merely a contravention of an industrial statute or industrial
instrument.[109]

The Law Institute of Victoria argues also for
a reduction in the penalty stating:

[ ] as Wilcox describes [ ], a court, not a
statutory authority, performs the issuing of a subpoena and a
magistrate or judge oversees the giving of evidence by the person
subject to subpoena. The Bill does not afford these safeguards to
construction workers and union officials upon the issuing of an
examination notice, and thus some caution should be taken when
imposing penalties for non-compliance.

The LIV supports the view expressed by Wilcox,
and recommends that the penalty of six months imprisonment under
section 52(1) be amended to reflect the nature of the offence. The
LIV submits that a more proportional and appropriate penalty would
be a significantly increased monetary fine.[110]

Professor George Williams and Nicola McGarrity
of the Tobin Centre of Public Law in Sydney support all the
safeguards on use of the examination powers stating that they
recognise that they amount to an impressive, and much needed, set
of improvements.

In particular, conditioning use of coercive
powers upon the approval of a presidential member of the
Administrative Appeals Tribunal will remove both the possibility
and the perception that the powers may be used for inappropriate,
even ideological, purposes. Other improvements such as the
imposition of a sunset clause, and an expanded role for the
Commonwealth Ombudsman are also highly desirable.

However, we note that even with these
safeguards the coercive powers provided for in the primary Act are
not justified. The safeguards do not, for example, overcome the
fact that the coercive powers can be used in an overly-broad set of
circumstances, such as in regard to non-suspects and children in
the investigation of minor or petty breaches of industrial law and
industrial instruments. The coercive powers are not justified in
this industrial setting. The preferable course would be to remove
the powers entirely and to have a strong and effective enforcement
and investigation regime that applies across all
industries.[111]

The Bill at proposed section 36B (item
52) creates the statutory office of the Independent
Assessor Special Building Industry Powers (Independent Assessor).
The person is to be appointed by the Governor-General providing the
Minister is satisfied that the person has suitable qualifications
and experience and is of good character (proposed section
37). The terms and conditions of this appointment are set
out in proposed sections 37 to
37G.

Proposed section 39 is a key
provision setting out the role of the Independent Assessor. The
Independent Assessor may on application from an interested person
make a determination that the compulsory examination notice powers
set out in section 45 will not apply to a particular building
project or projects. Proposed subsection 36(2)
defines interested persons to be the Minister and any other person
prescribed by regulations. In response to concerns about the
meaning of interested persons , the Minister has advised that the
Government s intention is that the regulations would prescribe all
building industry participants (as defined by the existing Act) in
relation to the project to which the application relates, to be
interested persons .[112] This means all project employers, employees, their
respective associations and the client(s) would be able to make an
application to the Independent Assessor.[113]

In determining whether the examination powers
will apply the Independent Assessor must be satisfied that:

it would be appropriate to make the determination, having
regard to:

- the object of this Act, and

- any matters prescribed by the
regulations, and

it would not be contrary to the public interest to make the
determination (proposed subsection 39(3)).

The Minister states that it is the Government
s intention that the regulations prescribe the Independent Assessor
must be satisfied that the building industry participants in
connection with the building project have a demonstrated record of
compliance with workplace relations laws, including court or
tribunal orders; and that the views of other interested persons in
relation to the project have been considered.[114]

Such determinations can only be made in
relation to building projects that begin on or after commencement
of these provisions (proposed section 38) expected
to be 1 February 2010.

Proposed sections 40 to
43 set out the process to be followed in relation
to Independent Assessor determinations. Amongst other things:

applications for a determination may relate to more than one
building project and may be made at any time before or after the
building project has commenced or after it has been completed
(proposed subsection 40(4))

the Independent Assessor must give the Director a copy of any
application and must give the Director a reasonable opportunity to
make submissions in relation to an application (proposed
section 41)

determinations must be published in the Gazette and take effect
from that date of publication (proposed section
42)

the Director may request the Independent Assessor to reconsider
determinations made in relation to a building project. Where the
Independent Assessor receives such a request he/she must reconsider
the original determination and make a determination affirming or
revoking the original determination, or varying the original
determination as appropriate (proposed section
43).

The Minister s second reading speech
elaborates on this power saying:

In the event that a project where the coercive
powers have been switched off experiences industrial unlawfulness
the Independent Assessor may rescind or revoke the original
decision, thereby switching the powers back on. Additionally, the
Director of the Building Inspectorate may request the Independent
Assessor reconsider the decision at any time based on changes in
circumstances on a specific project.[115]

Industry groups, such as AiG, argue that it is
not appropriate to permit the compulsory examination powers of the
Inspectorate to be switched off . They note that Justice Wilcox
recommended extensive safeguards for the compulsory examination
powers but he did not recommend that the powers be able to be
switched off . Furthermore, under the Bill, applications to the
Independent Assessor to switch off the powers can be made before a
project commences. AiG argues that before the commencement of a
project it is impossible to know whether the powers will be needed.
Unless the Bill is amended, unions are likely to make an
application to the Independent Assessor before the start of every
project.

The combined construction unions submission
argues that the switch off powers provisions create major
difficulties and anomalies. They state that given the conclusions
of the Wilcox Report that the vast majority of the construction
industry is not subject to major industrial misconduct, it would be
far more logical if the Bill were based on a presumption that the
necessity for coercive powers was the exception rather than the
rule. In other words a preferred alternative would be for the
powers to be switched off generally but be available to be switched
on only in truly exceptional circumstances and only subject to the
other processes and safeguards contained in the Bill.[116]

The unions are also critical of the way in
which the Bill deals with the timing of switch off applications and
the projects in respect of which they can be made is anomalous and
unwieldy. They point out that large projects commencing just prior
to these amendments with a potential life of many years would be
unable to be excluded from the application of the coercive powers
even where the record of compliance was exemplary.[117]

Item 69 repeals Division 2 of
Part 2 of Chapter 7 of the Act (which deals with the appointment
and powers of ABC Inspectors) and replaces it with proposed
sections 59 to 59G which provide for the
appointment and powers of Fair Work Building Industry Inspectors
(inspectors).

Under proposed section 59,
the Director may appoint employees or office holders of the
Commonwealth, or a State or Territory as inspectors. The Director
may only appoint a person as an inspector if satisfied he/she is of
good character. The Director is also an inspector by force of
proposed section 59A.

Proposed section 59C provides
that an inspector has the same functions and powers as a Fair Work
Inspector but may only perform those functions and powers in
relation to a building matter[118] and subject to the conditions and restrictions
specified in the instrument of appointment.

Proposed subsection 59C(4)
provides that, for the purposes of the performance and exercise of
the functions and powers of an inspector in relation to a building
matter, an Act has effect as if a reference to a Fair Work
Inspector were a reference to an inspector and a reference to the
FWO were a reference to the Director. The Explanatory Memorandum
elaborates on the effect of this provision. For example, in
relation to building matters, an inspector may:

make applications to FWA in relation to persons who hold entry
permits for the purpose of exercising rights of entry[119]

make applications for orders in relation to contraventions of
civil remedy provisions contained in the FW Act[120]

make applications for orders in relation to safety net
contractual entitlements[121]

exercise compliance powers for the compliance purposes as set
out in section 706 of the FW Act (including determining whether the
FW Act or a fair work instrument has been or is being complied with
or whether a safety net contractual entitlement has been
contravened)

issue compliance notices where the inspector reasonably
believes that a person has contravened one or more instruments as
listed in section 716 of the FW Act.[122]

The Explanatory Memorandum also elaborates
on the compliance powers that could be exercised by an inspector
demonstrating how they would be the same as those that could be
exercised by a Fair Work Inspector.[123]

Proposed section 59E provides
an additional power for inspectors, namely the power to monitor
compliance with the Building Code. The inspector s powers and
functions for this purpose would be the same as those he/she would
have in relation to monitoring compliance with a fair work
instrument.

Proposed section 59D provides
that the Director has the power to accept a written undertaking in
relation to a building matter in the same way that the FWO may
accept written undertakings under section 715 of the FW Act.

In place of existing section 64, item
74 also inserts proposed new sections 64
and 64A that deal with the disclosure of
information.

Proposed section 64 provides
the Director may disclose, or authorise the disclosure of,
information acquired by the Inspectorate if the Director reasonably
believes that it is:

necessary or appropriate to do so for the purposes of the
performance of the Director s functions and powers, or

likely to assist in the administration or enforcement of
Commonwealth, State or Territory laws.

The section also permits disclosure of
information to the Minister, the Departmental Secretary and SES
officers in the Department, and the Advisory Board
(proposed subsections 64(3) to (5)).

This disclosure provision does not apply to
information obtained under an examination notice or an examination
(proposed subsection 64(1)). Such information is
subject to the more restrictive disclosure provisions in existing
section 65.

Proposed section 64A deals with
disclosure of information by the Federal Safety Commissioner. The
Commissioner s disclosure responsibilities are similar to those of
the Director.

Items 85 and 86
amend sections 71 and 72. Their
effect is to allow the Director (as opposed to the ABC
Commissioner) to intervene in court proceedings and make
submissions to FWA in relation to building industry participants or
building work.

In relation to the power to intervene in
proceedings, the Wilcox Report recommended against retaining a
statutory right of intervention in court or FWA proceedings, noting
that

in order to guard against the case being
hijacked, it is better to give the court or FWA discretion to allow
intervention. In that way terms may be imposed.[124]

It is the ACTU s view that if a right to
intervene is to be retained it should be identical to that
conferred on the Fair Work Ombudsman under section 539 of the FW
Act.[125]

It would be highly inappropriate for an
inspectorate, which is established to enforce the law, to be
involved in proceedings relating to private interest-based disputes
about enterprise bargaining including applications for secret
ballots, bargaining orders and suspension of industrial
action.[126]

In contrast, AiG and other industry groups
argue strongly for the retention of the Director s right to
intervene.[127]

deal with matters of a transitional, savings or application
nature arising from this Bill (item 1)

amend Acts where the amendments are consequential on or relate
to the amendments made by this Bill (item 2).

Item 2 would effectively
enable delegated legislation to override earlier legislation. The
use of these so called Henry VIII clauses [128] can be a source of concern to the
Senate Scrutiny of Bills Committee if the provision is considered
to insufficiently subject the exercise of legislative power to
parliamentary scrutiny. To date, the Senate Committee has made no
comment. [129]

Item 3 allows regulations to
have retrospective effect. This retrospective application is
modified to the extent that subitem 3(2) provides
that if a regulation takes effect before it is registered, a person
cannot be convicted of an offence or ordered to pay a penalty in
relation to conduct contravening the regulation that occurred prior
to registration. Again, the Senate Scrutiny of Bills Committee has
to date made no comment.

Concluding comments

The Bill has evinced entrenched positions from
both sides of Parliament, with the Coalition parties preferring no
change with the BCII Act remaining unamended, while the ALP is
committed to aligning regulation of the building and construction
industry to the general standards pertaining under the FW Act,
while retaining a specialist Fair Work inspectorate to deal with
the building industry. It is therefore difficult to avoid the
premise accepted by Murray Wilcox, that a replacement of the ABCC
needs to be taken as a given, in this debate. The issues of the
proposed inspectorate s coercive powers for conducting examinations
and ascertaining information and whether a site or enterprise needs
to be subject to special regulation, therefore become the focus of
debate. In this context, it becomes difficult to disagree with the
Williams and McGarrity view that the safeguards introduced by the
Bill and its support measures for an individual required to give
evidence, videoing interviews, as well as the higher standard of
convincing the AAT that such an inquiry is relevant to a matter,
all seem to be significant improvements to current
arrangements.

[6]. T R H Cole RFD QC, Final Report of the Royal
Commission into the Building and Construction Industry,
Commonwealth of Australia, Canberra, February 2003, viewed 6 August
2009, http://www.royalcombci.gov.au/hearings/reports.asp

[12]. J.S. Winneke, Report of the Commissioner
appointed to inquire into activities of the Australian building
construction employees and builders labourers federation,
Australian Government Publishing Service (AGPS), Canberra, 1982,
pp. 388-389.

[66]. A designated building law means the BCII Act,
the Independent Contractors Act 2006, the FW Act or the
Fair Work (Transitional Provisions and Consequential
Amendments) Act 2009; or a Commonwealth industrial instrument
(section 4).

[67]. See p. 33of the Digest for information on the
role of the Independent Assessor.

[71]. Specifically, the Director may not delegate the
power to apply for an examination notice under section 45 or the
power to vary the time for compliance with an examination notice
under section 50. See p. 27 of the Digest for an explanation of the
examination powers.

[94]. Under subsection 4B(2) of the Crimes Act
1914, to which the note refers, if a Commonwealth statute
provides only for a term of imprisonment then a court, if it
considered it appropriate, could impose a fine instead of or in
addition to a jail term the maximum of which is according to the
formula in the Act (the term of imprisonment set out in months
times five).

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